Russia’s fisheries production continues to climb, reaching an all-time high of 5.03 million metric tons (MT) in 2018 and coming close to that mark again last year with a total catch of nearly five million MT.
But the Russian government thinks the country can do better.
Under its newly published “Strategy for Development of the Seafood Industry through 2030,” the government has set ambitious targets for increasing volume and value totals. The strategy document lays out goals previously identified by Ilya Shestakov, chairman of the Russia’s Federal Agency for Fisheries, who said in 2017 he would push for using national quotas to a fuller extent. Shestakov has noted that practically all of Russia’s commercial stocks are stable and not overfished, with most of them governed by total allowable catch (TAC) limits set by Russia’s Ministry for Agriculture. Shestakov has proposed several new initiatives set to help Russia achieve greater production in its fisheries, and noted a number of other recently implemented changes will further help the country boost its totals.
Highest among the priorities of the Federal Agency for Fisheries, Shestakov said, are investments into salmon smolt production and the improvement of Russia’s ports, fishing fleet, and other fisheries-related infrastructure.
Russia’s fleet is being renewed at a rapid pace due to the introduction of investment quotas, but the vast majority of the fleet remains obsolete and inadequate for the task of increasing Russia’s total fishing haul. Of all the long-range trawlers-processors in the Far Eastern Fishery basin and medium-range trawlers-processors in the Northern Fishery basin, only one percent was built less than five years ago. Yet overall, the share of vessels at least 25 years old is seven percent. And from 2000 through 2018, Russia’s overall number of fishing vessels decreased by 25 percent. The fleet as it exists now remains inefficient in terms of fuel consumption and processing capability, significantly reducing the performance and profitability of the industry.
Additionally, Russia’s port infrastructure is obsolete and lacking in handling and storage facilities. Up to one-third of the national catch is delivered to sales outlets without compliance with proper temperature controls, which results in a poor quality of seafood reaching retail shelves. And Russia’s dependence on a rail system with problems of its own is curtailing delivery of fish from the Russian Far East to central parts of Russia, where most consumers live.
To address the issue, the Russian government is leading an effort to invest RUB 26.5 billion (USD 423.7 million, EUR 362.6 million) in state and private funds by 2025 into the refurbishment and expansion of the country’s fishing terminals.
Shestakov said he is also pushing for the development of the country’s aquaculture sector. Though its growth has accelerated in recent years, with an annual growth rate of 15 percent, its overall size is still tiny, accounting for just a sliver of the nation’s seafood output. In 2018, Russia’s aquaculture production was was 239,000 MT, and initial estimates for 2019 forecast production of around 300,000 MT. In most segments, Russian aquafarmers remain dependent on imported equipment, aquafeed, and seed – something Shestakov said he would like to change.
In terms of producing more value, Shestakov and Russia’s government have also crafted a multi-pronged strategy – but one that increasingly has cod at its core.
Shestakov noted that Russia holds considerable shares of the world’s cod, a fact also noted by Nordic Group Vice President Frank Bodin at the recent Global Seafood Market Conference.
“The Russian fishery, which used to be a small portion of the cod fishery, is [now] actually of equal size, if not a little bit bigger, than the U.S. side,” Bodin said, alluding to the closure of the Gulf of Alaska cod fishery in 2020 and the increase in size of Russia’s own cod fishery.
Russia’s new strategy document calls for the country to follow the model created by the United States, which pursued value-added cod production, which increased by 100 percent over the last 30 years. Currently, 90 percent of Russia’s cod exports are raw fish with little added value, primarily due to logistical constraints, with many of Russia’s cod processing facilities located far from fishing areas, resulting in quality issues and higher end-user prices.
But that situation is changing as the country advances its investment into building “super-trawler” catcher-processors and state-of-the-art processing plants. Under the investment quota program, 43 new ships and 26 new processing plants are either under construction or planned, mostly in the Far Eastern the Northern fishery basins. By 2025, the Federal Agency for Fisheries estimates 50 percent of all fishing and processing facilities in the country will be new or newly renovated, with that number reaching 100 percent by 2030, at a cost of RUB 340 billion (USD 5.47 billion, EUR 4.9 billion), mainly paid for by the private sector in exchange for higher quotas.
To bring these higher-quality products to market, Russia has launched a new campaign called “The Russian Fish.” The strategy calls for the elimination of intermediaries between Russian fisheries and processors and consumers.
In regard to cod, China is seen by Russia as the most promising market over the next 20 years, with the United States, Great Britain, the European Union, and Latin America seen as other potential outlets. Russia is gearing up to offer cod fillets and mince to China, the E.U., and Latin America; chilled pollock and jerked fillet to South Korea; and clipfish of salt cod to Southern Europe.
Some in Russia’s seafood industry have expressed concern that, despite consolidation in the industry, there are still few vertically integrated companies able to manage the whole supply chain from sea to shelf and to offer products of high quality at competitive prices. But German Zverev, the president of the All-Russian Association of Fishing Industry (VARPE), a trade group, said in Russia’s targets as laid out in the strategy document look achievable.
“The document had been discussed with business several times, all the private sector’s remarks have been taken account of,” Zverev said.
Sergey Gudkov, the president of the Russian Fishery Union, expressed doubts about the strategy’s feasibility in an interview with Expert magazine. The document lacks consistency, he said. In his opinion, it’s impossible to increase exports without additional stocks that are simply not available.
“We need three to four million MT more than we have now to achieve the targets set by the strategy, but there is no any idea where to source them from,” he said. Gudkov noted Russian President Vladimir Putin has also called for a doubling of revenue from agriculture exports, an initiative which will be prioritized over the seafood sector, he said.
Gudkov said instead of focusing on exports, Russia’s fisheries firms should focus on the domestic market, where seafood consumption appeared to be rising before Russia was hit with international sanctions and, in return, imposed a trade ban on food imports from Western countries. From 2010 to 2014, per capita seafood consumption rose to 22.3 kilograms from 21.2 kilograms, before leveling off at 22.1 kilograms in recent years.
Achieving self-reliance in seafood consumption is a realistic goal, according to Gudkov, as 71 percent of Russia’s total catch comes from Russia’s exclusive economic zone of Russia, with just 16 percent being caught the in waters of other countries and 13 percent caught in the open ocean and inland bodies of water.
Whatever the strategy, Gudkov and other Russian seafood industry representatives seem confident that the sector’s total sales, at RUB 557 billion (USD 8.85 billion, EUR 7.93 billion) in 2018 – up 11 percent from 2017 – will continue to enjoy an upward trajectory.
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